Page 195 - The Drucker Lectures

176 [ The Drucker Lectures

also where the noncustomers are. Even if you are the dominant
business in your field, you very rarely have more than one-third of
the market, which means that two-thirds of potential customers
do not buy from you. You should make sure that you have enough
time to look at these noncustomers. Why do they not buy from
you? What are their values? What are their expectations?
Change practically always starts with the noncustomers. To-
day, almost all of the industries that dominated the industrial
landscape in the developed countries in the 1950s and 1960s—
the automobile industry, the commercial banks, and the big steel
companies—are on the defensive, and in every single case the
change started on the outside among the noncustomers. The
department stores in the United States and Japan are in terrible
trouble, whereas 40 years ago they dominated retail distribution.
The change there also started with noncustomers. The basic the-
ory of the department store is that the husband is at work, the
children are at school, and so the wife can spend a lot of time
there and get a feeling that she is doing something for the family,
for herself. Suddenly, women—first in the United States and now
increasingly all over the developed world—have jobs and they do
not have the time. But these educated women were never depart-
ment store customers in the first place. And so the department
stores, which of all our businesses probably have the best statistics
on their customers, did not even realize that the next generation
did not shop in their stores until they suddenly lost the market.
So the first thing to do is make sure you are close enough to
the outside that you do not have to depend on reports. The best
example I know: Many years ago a man built one of the world’s
major businesses, the first business that really took advantage
of the great change in medicine when the practice shifted from
the individual practitioner to the hospital. (That happened af-
ter the Second World War in the developed countries.) And he
had a simple rule: Every executive in that company, from the